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Break Down Traditional Bill Review Procedures

—August 23, 2016
 Break Down Traditional Bill Review Procedures

By Greg Gaughan Vice President and General Manager, Out of Network Solutions, Mitchell Casualty Solutions Group

By Joshua Dickerson Director of Product Management, Out of Network Solutions, Mitchell Casualty Solutions Group

Payors often fall into a pattern of sending their workers’ compensation medical bills through the same process they always have, and are consequently getting the same results they’ve always gotten.

Now, a few payors are catching on to a new, innovative trend of switching up their cost containment methods to achieve better results — using specialty bill review (SBR) before traditional networks in their bill review process. Many times, network discounts aren’t robust, meaning that by only sending medical bills through the traditional network route, some payors are overpaying on medical bills. SBR is already the highest yielding solution applied to a medical bill set. By positioning it in different places in the workflow stack and not confining themselves to one traditional bill review order, payors are seeing even better results through improved savings, specifically on facility bills.

What is Specialty Bill Review?

SBR is a service that helps provide additional cost containment above and beyond the traditional bill review method. As a differentiated “specialty” solution, SBR identifies and corrects issues not captured by traditional bill review systems, like coding errors, bundling redundancies and misapplied policies, using repricing algorithms and methodologies based on historical negotiation data and state standards for payment. Payors traditionally use SBR to calculate a fair and reasonable price on medical bills when they don’t already have an agreement with the provider.

Funnels Two different components make up SBR services – market value pricing (MVP) and charge validation analysis (CVA). Market Value Pricing is the service that’s most commonly used by payors who use SBR. The MVP service analyzes bills line-by-line in an effort to determine a fair value for medical services performed, since many times, items such as implants, devices or drugs don’t reflect the appropriate pricing. By using rules-based technology based on jurisdictional case law and legal benchmarks for charge limitations combined with technology that searches and analyzes different aspects like accepted payment comparisons, the MVP service is able to determine the fairest price on medical bills.

Payors typically use CVA, the other component of SBR, to help catch invalid charges. The CVA service uses automated evaluation technology to identify inappropriate charges through an intensive review for line item and coding accuracy. During the review, CVA looks for errors like charges for items and services that weren’t provided, charges that are undocumented or unrelated, and treatment for injuries or illness caused by the facility or provider.

After the review process, the CVA service reduces invalid and inappropriate charges to help ensure payors are only paying for necessary charges on a medical bill.

After review, an SBR service should recommend a payment at a rate that’s about 35 percent of the original bill charge, on average. Once the payor then offers the payment to the provider, the SBR vendor should manage and resolve any issues that arise on the payor’s behalf.

Traditional Use

Traditionally, SBR has been reserved for medical bills that are out of network. Payors usually set up their workflow so that medical bills are sent through traditional networks before sending any that didn’t receive network discounts through the SBR process. For example, a payor will send all of its medical bills through their network and pay the contracted rate on in-network medical bills and send the remaining medical bills through the SBR process for a reduced rate. In this method, the majority of medical bills are sent through networks and only a small portion of medical bills go through the SBR process.

Throwing Out the Original Method

Sometimes, network discounts aren’t enough. Though networks provide discounts on medical bills, many times these rates still aren’t the best prices available for payors. Though many payors choose to, it’s not necessary to lead with network options first. In fact, in certain jurisdictions, such as Arizona, New Jersey, Iowa and Missouri, leading with SBR instead of network options first produces even better financial results, especially on facility bills.

A benefit of placing SBR in the primary position in a payor’s stack is that the majority of medical bills will go through SBR, meaning the highest yielding solution will be impacting the most medical bills. When a payor arranges their workflow like this, they are able to achieve better cost containment than if they are relying on networks to do the majority of their medical bill reductions.

Positioning SBR higher in the stack is easy to do if your bill review engine allows for flexibility and customization and doesn’t require one specific workflow. By simply using SBR before networks, a payor can start seeing an average 33-40 percent jump in savings and revenue, and will begin to pay better pricing more consistently.

 

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